This is an immediate (and limited) response to and summary of the Budget presented on 28 October 2026. It is written based on what was said in the Budget Statement and the information released by HM Treasury immediately after the Statement. More details will emerge over the coming days and we will not know the important detail until the Finance Bill is published.
No action should be taken based on this summary without obtaining detailed written advice.
The Chancellor: Middle East war has driven up costs. OBR predicts £14bn more on debt interest this year. Manifesto promise not to raise taxes on working people. Fiscal rules will be met in third year of forecast. He said that he had unveiled a Budget that gives families and businesses breathing space today, while delivering the big structural changes needed for the future.
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Small business rate relief threshold increased from £12,000 to £18,000.
Tax avoidance: HMRC given further powers to collect unpaid taxes.
ISAs: Tax-free cash ISA limit to stay at £20,000 per annum, reversing the previously announced decision to restrict this.
Tax on property and investment income increased by an additional 2% on all bands from 6 April 2027.
Banks: Smaller than expected extra 3% on bank surcharge. Starting in January and ending 15 months later.
Innovation and entrepreneurs
- CGT Business Asset Disposal Relief (BADR) limit cut from £1m to £500k for disposals on or after 6 April 2027. There are special provisions that apply to contracts entered into before 6 April 2027 that have not been completed, and for certain share reorganisations and exchanges of securities not completed, before 6 April 2027.
- Consultation on a new Founders Relief, to encourage founders to scale their companies the UK, and when the time comes, reinvest in the next British success story. It will offer eligible founders of high-growth, innovative companies a reduced 10% rate of CGT on up to £10 million of lifetime gains. Legislation will be included in the Finance Bill 2026/27 and the relief will apply to qualifying disposals made on or after 6 April 2027.
- tripling the trading allowance from £1,000 to £3,000 to support people starting a business. The allowance provides relief for trading and miscellaneous income and simplifies the system for those individuals who choose to use the relief, where the allowances cover all their relevant income before expenses, as they will no longer have to declare or pay tax on this income. The trading income reporting threshold for Self-Assessment will also be increased to £3,000. These changes will take effect from 6 April 2027.
- Minor improvements to venture capital schemes.
- simplifying access to R&D tax reliefs to help growing firms attract investment and innovate. This will involve removing the requirement to submit a Claim Notification Form for R&D claims made on or after 1 April 2027 and will simplify and rationalise the information required in the Additional Information Form for companies that claim R&D tax relief from autumn 2027.
- expanding tax-advantaged employee share option schemes to help ambitious businesses recruit and retain talent.
- The CSOP individual option limit will be increased to £120,000.
- The interaction between the CSOP and EMI individual options limits will be removed.
- The CSOP exercise period will be extended to 15 years.
- The period for certain tax-advantaged and non-tax advantaged shares and share options reserved by third parties to be excepted from the disguised remuneration rules will also be extended to 15 years.
- The exception for Employee Ownership Trusts (EOTs) in the EMI rules will be extended to companies arranging to become controlled by an EOT.
- The EMI exercise window following disqualifying events will be extended to 180 days.
The changes will take effect from 6 April 2027.
The Chancellor is also launching a new young entrepreneurs allowance, which will cover a year of living costs for young founders “while they turn their ideas into businesses”.
New scale-up programme to female founders, and British business bank will double its commitments to women-led businesses in funds to £200m.
Capital allowances: increases to the main rate first-year allowance to 50% for expenditure incurred on or after 1 January 2027 and to reduce the main rate writing-down allowance to 12%, to take effect from 1 April 2027 for Corporation Tax and 6 April 2027 for Income Tax.
This was not a headline-making Budget. It was very much “steady as we go” with small giveaways with one hand and small tax increases on the other. The new incentives for founding entrepreneurs and the increased benefits of the EMI scheme are welcome and unexpected. Apart from this, and as recently predicted there appears to be very little in terms of technical changes.
